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House Committee Looks at Mortgage Servicer Response to Pandemic
Thursday, July 16, 2020
The House Financial Service Committee's Subcommittee on
Oversight and Investigations held a hearing on Thursday entitled, "Protecting Homeowners During the Pandemic: Oversight
of Mortgage Servicers' Implementation of the CARES Act." Scheduled witnesses
were Alys Cohen, staff attorney, National Consumer Law Center; Marcia
Griffin, Founder and President, HomeFree-USA; Donnell
Williams, President, National
Association of Real Estate Brokers; and Ed DeMarco, President, Housing Policy Council and
former acting director of the Federal Housing Finance Agency (FHFA).
The
subcommittee's memorandum lays out some of the issues the hearing is designed
to air concerning the servicer industry's response to the CARES (Coronavirus
Aid, Relief, and Economic Security Act. Cares was enacted on March 27, 2020, in
part to provide protections for homeowners facing economic hardships due to the
pandemic.
As of
the mid-June, nearly 33 million people claimed unemployment benefits compared
to 1.6 million a year earlier, and at the end of May 7.76 percent of mortgages
were a month or more past due. While the protections in the CARES Act do not
cover all residential mortgages in the United States, federally backed
mortgages represent about 70 percent of outstanding single-family mortgages and
increase opportunities for homeownership among low- and moderate- income
borrowers. As of June 28, 8.39 percent of all mortgages in mortgage servicers'
portfolios, were in forbearance.
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